Option 2

As we want to compete with Ontario directly, we will use the demand of basic servers

Strategy 1

Cost $ 2,000
Margin $ 462

Demand

Year 1 Year 2
Basic segment 50,000 70,000
High performance 200,000 205,000
Total 250,000 275,000

Fixed demand

Year 1 Year 2
Total demand 2,000 6,300

Total units 21,180

Units with PESA 10,590
Cost of PESA $ 2,000,000
Breakeven (cost) $ 189
Price with 30% mark up $ 245.51
Revenue $ 56.66

Margin without PESA $ 462.00

Magin with PESA $ 5,318.66

Profit
Year 1 Year 2
Without PESA $ 462,000 $ 1,455,300
With PESA $ 5,318,657 $ 16,753,770
Total profit $ 61,217,160
se the demand of basic servers

Strategy 2

Cost $ 6,800
Margin $ 5,262

Year 3 Year 1 Year 2 Year 3

92,000 Market Share 4% 9% 14%
210,500
302,500 50% with PESA 50% without PESA

Year 3
12,880

Year 3
$ 2,975,280
$ 34,252,153
Questions

c.

d.

e.

f.

g.
Questions

As he has 20 years of experience in the computer sector and that almost all of the company's other products have status qu
estimate. They charge $1,700, and Matzer has suggested a $2,000 price point, so bringing a r

While they will make more commissions due to the elevated price, I believe that is gonna exist some resistance on adoptiong a

The pricing should support and align with the product proposition. They are providing a machine that is neither basic (Ontari
spectrum or the other if a company differentiates its goods in ways that go

Most costumers are always adverse to increse in products. They have the alternative of buying Ontarios' service for much less

At first, as Ontario is competing in another segment, they may not react at all to Atlantic's bundle. But, if Atlantic does begin t
to PESA or change their offline sales strategy to
could be painful

re charging.